White Papers

For many years, our colleagues at Altman Weil have been tracking merger and acquisition activity among US law firms. In 2017, they track 102 such combinations. The average size of the acquired firm is 27 lawyers with the Southern US identified as the most active region. Here are a few other highlights in this year’s MergerLine report.

Law Firm Merger/Acquisition Activity at All-Time High
Altman Weil has been tracking mergers and acquisitions since 2007. Since a post-recession low of 39 in 2010, law firm acquisitions have steadily climbed to 91 in 2015, 85 in 2016 and 102 in 2017.

BigLaw Continues to Get Bigger
The average size of the “acquiring” law firm was 982 lawyers. Dentons now has a staggering 7,800 lawyers in its ranks. Norton Rose had two major acquisitions in 2017 and has grown to 3,800 lawyers.

No Let Up in Sight
Most managing partners, in-house counsel and consultants to the legal profession project that consolidation and convergence will continue both globally and wiring the US.

Opportunity Abounds for Mid-Size Firms
We believe that well-run smaller and mid-size law firms – that is to say firms with a plan, leadership, accountability and firm-first culture – sit in a great place to take advantage of long-term trends impacting the profession. Bigger is not always better!

Consolation is a clear and ongoing trend in the US legal market, and Altman Weil has been tracking law firm merger activity since 2006. After a post-recession dip in the number of law firm combinations, 2016 was the fourth consecutive year with more than 80 mergers and acquisitions. Here are some of the more interesting highlights in this report:

The largest merger on record occurred in 2015 as Dentons (2,500 lawyers) combined forces with China’s Dacheng (3,600 lawyers).

Seventy-five percent (75%) of law firm combinations involve large firms acquiring much smaller firms, often in the 2-20 lawyer range.

Succession is among the primary reasons smaller firms seek to become acquired by larger firms.

The most combinations have occurred in the Southeastern US, with 195 mergers and acquisitions tracked in the last ten years.

States with the most activity are California (78), New York (57), Florida (51) and Texas (49).

In addition to the report itself, there are four good articles, including one entitled “Is this Merger a Good Idea?”

This 15-page White Paper draws on several other reports and surveys to present its findings and conclusions about today’s marketplace for legal services, and every firm leader should take the time to read and study it. We encourage you to take a step further and share its highlights with your partners. In it, you’ll read about market conditions - flat demand, more competition, improve efficiency, more commoditized work, non-traditional service providers - that should deeply concern law firm owners. But you’ll also read about opportunities for those firms with leadership and a willingness to innovate. Another good sign for mid-size firms: It cites evidence that in-house counsel is sending more "important" matters to smaller and mid-size firms than they were three years ago. Finally, it suggests that growth should be the outcome of well-executed, proactive, client-driven strategy, not be the strategy itself.

Good news for litigators! This year's trends survey, conducted by Fulbright & Jaworski, reports that litigation is up in most every area of law due in large part to the sour global economy. Contracts, bankruptcy, employment and personal injury lead the way. Electronic discovery is another hot, rapidly growing area of law. The 64-page survey report, which includes over 400 US and UK respondents, also cites an increase in the use of alternative fee arrangements for litigation matters.

As we approach year-end 2009, our friends at Smock-Sterling report good news to law firm leaders. They surveyed over 100 midsize firms, asking 26 important questions about the present and future legal marketplace. While many firms and practice areas have taken big hits during the economic downturn, most have not; and the law firm business model has proven itself to be remarkably resilient, especially for midsize firms.

Forum Faculty member John Smock and his partners recently wrote this assessment of how law firms are performing in the midst of the current economic downturn. And it's not as bad as you might think for the well-managed law firm.